I have studied thousands of innovation efforts and found that the distinction between success and failure boils down to six words. The successful ones “Think Big, Start Small, Learn Fast.” The failures do not.
By “think big,” I mean that successful innovators consider the full range of possible futures. They make sure they understand the emerging technology context, rather than assume that their current assumptions are right. They’re not too proud to explore their doomsday scenarios, including how new developments might drive them out of business. And, rather than just looking for incrementally faster, better or cheaper products, they dare to dream big.
Successful innovators are willing to start from a clean sheet of paper to pursue “killer apps”—new products that might rewrite the rules of a category or entire industries.
For example, as I chronicled in my book, The New Killer Apps: How Large Companies Can Out-Innovate Start-Ups, coauthored with Paul Carroll, the Self-Driving Car team at Google does not just aim to make people better drivers, they are trying to take human drivers out of the loop entirely. They are not just aiming to make slightly better cars; they are focused on full automation—because full automation enables dramatically improved usage patterns and disruptive business models.
By contrast, those who fail typically think small. They assume that the future will be a slightly different version of the present.
It’s human nature to see change as incremental and to think that our customers will stick with us, but incremental thinking can be very dangerous.
For example, Microsoft, Motorola, Blackberry and Nokia all missed the smartphone because it didn’t fit with their own technology assumptions, and they couldn’t envision how it might challenge their own products.
Successful innovators “start small” after thinking big. Rather than jumping on the bandwagon for one potentially big product, they break the idea down into smaller pieces for testing. They don’t allow themselves to make decisions solely on intuition, or allow themselves to lock in on financial projections based on wishful thinking. They defer important decisions until they have real data.
Those who fail typically think small—like Borders, Blackberry and Kodak—but then start big when they do finally move.
Our research found that companies that should be innovating in the face of a disruptive technology tend to swing from complacency to panic. After ignoring opportunities because they can’t accept that they’re in danger, they finally see the disruption and make a last-chance, massive bet on a single idea—only to have it not pan out.
Companies that “learn fast” take a scientific approach to innovation. They take the attitude that a demo is worth more than thousands of pages of business plans.
They conduct extensive, inexpensive prototyping before they even get to the pilot phase—let alone the big rollout—so they can gather comprehensive information and quickly analyze both what’s working and what isn’t.
They also don’t fall in love with their own ideas. They have the discipline to keep on asking the tough questions and are ready to set aside or alter projects based on what they learn, not what they hope.
Again, you can see this with Google, which has fielded dozens of cars for hundreds of thousands of miles of very public testing and learning, while others’ experiments are mostly hidden on their test tracks, except for very staged press events.
By contrast, thinking small and then betting big usually leaves neither the time nor the inclination to learn.
The combination of thinking small, starting big and not learning fast is what killed Blockbuster. It ignored Netflix’s DVDs-by-mail model for years, then bet big on its own version before fully working out the economic and operational implications—and it turned out that Blockbuster’s business model couldn’t handle the loss of those hated late fees.
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So, as an exercise, think about your highest aspiration for 2016. Are you preparing to think big, start small and learn fast?